An emerging philanthropic trend: the 'giving circle'

From a modest suite in downtown Charlotte, N.C., Pat's Place operates with a noble mission: to give battered children a refuge.

For director Anne Pfeiffer, who's planning to move the small nonprofit into a 2,400-square-foot house, asking for money has become second nature. But a few months ago, Pat's Place received one of its largest and least expected gifts: a $100,000 windfall, not from a corporate donor, but from a tightly knit group of no-name philanthropists from Charlotte's wine-and-cheese circuit.

In a modern spin on centuries-old "sewing circles," the 157 members of the Women's Impact Fund "giving circle" voted to spend their money protecting children from abuse.

Poor or rich, 20-somethings or retirees, more and more women are forming charitable investment clubs to research, socialize, and give - and in the process, they're revitalizing personal philanthropy, seizing on causes from battered children to relief for tsunami victims.

"For women, especially, this is an opportunity to really have an impact on their communities, to frame a vision, and also gain a hands-on

way to do it," says Mary Lou Babb, cofounder of the Women's Impact Fund. "And, of course, there's a whole social aspect to it."

From Seattle to Boston, "giving circles" are all the philanthropic rage, a swelling category in the landscape of giving. In the past four years, they've gone from just a handful of groups to at least 300, and have donated some $44 million along the way, according to New Ventures in Philanthropy, an arm of the Forum of Regional Associations of Grantmakers.

The rapid growth, say giving-circle members, comes down to a yearning for togetherness and an age-old desire among the financially better-off to address community problems.

With Americans donating less money - and to fewer nonprofits - than they have in 25 years, according to a survey by the Barna Research Group, and with nearly one-quarter of respondents saying they've lost faith in nonprofits, the comfort conferred by group research and communal decisions comes as welcome relief in a crisis of confidence.

It's evidence, too, that "personal philanthropy" is tapping a deeper root, in a nation where nearly 75 percent of giving comes from individuals.

"I think in a country where people feel they know their neighbor less [and] socialize less, giving circles are really getting people back together, and in the process getting people to think collectively," says Darryl Lester, a founding member of a Raleigh-based giving circle called the Next Generation of African-American Philanthropists (NGAAP). "The whole notion that everybody can be a philanthropist moves from theory to practice with the giving circle."

In essence, the groups work like investment clubs, often gathering at informal potlucks: With a minimum gift per member, the philanthropists do research and, once a month or once a year, vote on which charities will receive a cut of their fund. Contributions can range from $60 to $20,000 annually.

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